GAO Examines Limited Use of Student Grant Programs

March 26, 2009

Rigorous eligibility requirements and a faster-than-ideal timeline for implementing the Academic Competitiveness and SMART Grant Programs limited college students' use of the two new financial aid programs, the Government Accountability Office said in an analysis Wednesday. College officials will not be surprised by the federal agency's conclusions; they have consistently criticized the programs as well-intended but ill-conceived and crafted in the dead of the night without thorough review. The GAO report confirms early data showing underutilization of the two programs, finding that in 2007-8 about 460,000 students (instead of the projected 540,000) took advantage of grants totaling $511 million, less than the projected $700 million budgeted. The government study cites financial aid administrators' views that changes that will take effect this summer in the programs' eligibility and other requirements should improve the program's effectiveness.

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